Exclusive: ECB will react if Iran war pushes up inflation, Nagel says

ECB policymaker Joachim Nagel warned the ECB will move quickly and decisively if higher fuel costs from the Iran war feed into durably higher euro-area inflation. That raises the probability of tighter monetary policy and upward pressure on euro-zone interest rates and bond yields, with potential support for the euro and risk-off effects for equities sensitive to energy costs.

Analysis

ECB policymaker Joachim Nagel warned the ECB will move quickly and decisively if higher fuel costs from the Iran war feed into durably higher euro-area inflation. That raises the probability of tighter monetary policy and upward pressure on euro-zone interest rates and bond yields, with potential support for the euro and risk-off effects for equities sensitive to energy costs.